Workforce development has proven to be an essential component of economic development. and there is no shortage of challenges regions can face when it comes to finding workers to diversify and strengthen their economy. Labor shortages, a growing skills gap, rapid changes in technologies and demographic changes are all currently putting pressure on local workforces.
To effectively plan, train and develop policies or educational programs that address these challenges, it is essential to understand the trends that shape a region’s labor force.
So how are the demographics of workforce development changing?
An Aging Workforce
Baby boomers are retiring from the workforce, and taking their skills and knowledge with them. Finding ways to transfer this knowledge to a younger, willing generation of workers is a unique challenge that employers are currently facing.
Aging baby boomers are also creating high demand for workers in the healthcare industry as they get older, posing a challenge for an industry currently facing employee shortages and high turnover rates. Consequently, as more new workers are pulled into healthcare, it may leave gaps in other industries.
Millennials are the fastest-growing age cohort in the workforce, and as such workplaces may need to evolve to fit the needs of this generation, particularly during times of low unemployment.
Lower Labor Force Participation
A general trend impacting local regions is decreased labor force participation, which has steadily been in a downward trend due to the aging population and other factors. Some reasons from the U.S Bureau of Labor Statistics include:
- Increased dependent care needs
- Fear of getting COVID
- Higher unemployment benefits
- Desire for higher wages reducing interest in low-paying jobs
- Higher pace of retirements due to an aging population
- Slower population growth
Technological Changes
Industry 4.0 and IoT paired with robotics and automation will continue to transform manufacturing and industrial processes. Local workforces should prepare for technological changes to maintain competitiveness and improve efficiency. Data analytics, artificial intelligence and machine learning are other areas poised to reshape the economy and optimize business. To gain an advantage, the workforce should be familiar with these trends.
How to Respond to These Demographic Changes
Understanding these demographic changes and technological innovations, along with the changing nature of work and jobs, could be critical for workforce development initiatives. These demographic trends suggest some important potential implications and actions to consider, including:
Create cross-generational and diverse talent pipelines.
A way to diversify workforces is nontraditional pipelines that lead people of different backgrounds into the workforce. In the state of Delaware, the Delaware Pathways program can lead high school and middle school aged students of diverse backgrounds and income levels onto a job path they might not have been exposed to otherwise.
Expanded career pathways in the Hampton Roads region of Virginia has led to an increase in the number of licensures and credentials offered in K-12. These efforts, combined with continued awareness for and improved perception of regional employment opportunities will be critical for meeting future industry needs.
It also may be helpful to alter degree and skill requirements, as the state of Virginia recently did when it scrapped the demand to have a degree in order to cater to a workforce that is increasingly skipping higher education and heading straight into the workforce. The policy affected 90% of state job postings with the aim to improve hiring processes and expand possibilities and career paths for job seekers in the region.
Develop talent strategies for workforce segments target all ages and at different stages of their career.
Generational diversity will likely continue to define the workforce, with older workers representing one of the fastest-growing segments. Providing targeted training solutions that meet their needs and learning styles can be important in ensuring continued productivity throughout a worker’s career.
The state of Maryland’s Division of Workforce Development and Adult Learning aims to reach jobseekers, especially those with barriers to employment, with the workforce system’s employment and training resources. One program specifically targets older workers. Through the Senior Community Services Employment Program, those 55 and older who are unemployed can seek training and employment. Fairfax County, Virginia has a similar program for mature workers.
A fellowship program in West Virginia aims to retain and develop the state’s young workers. Nonprofit group Generation West Virginia has developed a 9-month long fellowship program aimed at those in their 20s and 30s interested in state careers to grow leadership and development skills and network with other young professionals and business leaders.
Establish new opportunities for lifelong learning and reskilling.
A potential opportunity for local workforces is to capitalize on talent from educational programs. Many educational institutions have partnerships with industry leaders to help provide access to education and training opportunities.
Programs in the state of Virginia have several workforce development partnerships. For example, Virginia Tech is working with the Commonwealth Cyber Initiative and CACI to collaborate on cybersecurity workforce development, and Virginia Commonwealth University (VCU) has partnered with industry to support workforce development for careers most affected by the health workforce shortage.
Internships, apprenticeships, and on-the-job-training play a critical role in increasing the talent pool and upskilling the incumbent workforce. In West Virginia, the Apprenticeship In Motion (AIM) program promotes and expands registered, nontraditional apprenticeship activity in the state. In addition to on-the-job training from experienced professionals and technical education, employees can receive nationally recognized credential of qualifications, increased wages, and improved skills and competencies that lead to career advancement. Benefits to businesses include:
- Reduces recruitment, turnover, and workers’ compensation costs
- Provides custom training and results in highly skilled employees
- Results in higher productivity
- Boosts a more diverse workforce
- Fosters employee loyalty
- Builds a steady pipeline to talent
Knowledge transfer between experienced and new workers could be possible through successful mentorship and/ or coaching programs. Sodexo USA, based in Gaithersburg, MD, has several mentorship programs within its company, including the BRIDGE program where participants engage in informal mentoring relationships tailored to increase their knowledge and skills as they gain exposure to one or more business lines.
Understanding how the demographics of workforce development are changing can be an asset to align and improve a region’s talent pipeline. Strategies that keep demographic trends and technological changes in mind can help develop, retain, and attract talent in the workforce.
